Are you lowering your property’s profitability with these common landlord mistakes?
Managing profitable rental properties can be a lot more work than you realized. We could write a book about all of the landlord mistakes we’ve seen in our years of property management, but we’ll save you some reading time. Here are the four most common landlord mistakes that will lower your rental property’s profitability:
Mistake #1: Inadequate tenant screening for your rental property
Inadequate tenant screening is one of the most common landlord mistakes that will lower your property’s profitability. It can happen from pressure to fill long-standing vacancies, lack of time and knowledge, and too high of trust.
As Montanans, we’re taught to be honest, hard-working people. Unfortunately, not everyone lives up to who they appear to be. A tenant who seems nice enough and comes with high praise from a mutual friend is not a sufficient reason to hand over the keys. Inadequate tenant screening can lead to violations of lease agreements, head-throbbing evictions, high turnover, vacancies, and then right back into the cycle.
Have you chased late rent checks, partial payments, or the novel-of-excuses missed payments? If so, it’s time to strengthen up and streamline your screening process.
Mistake #2: Not knowing when to hire a professional for maintenance jobs
As hard as it may be to hear, it needs to be said: DIY is for your hobbies, not your investments. Your rental property is an investment that should be treated as a business. You may be handy, thanks to a degree from Youtube University; however, hiring a professional can ultimately save you time and money.
Hiring a professional can also help you put your property’s best face forward to retain tenants. We know a frustrated tenant who got out of her lease agreement early because her landlord insisted on handling electrical and plumbing jobs himself. As a result, every time she wanted a hot shower, she had to turn on the front porch light. If the light wasn’t on, there was no hot water. It sounds absurd, but it’s a true story! How does that happen? It was an electrical issue that should have been handled by a professional.
Mistake #3: Skipping routine maintenance checks
Routine maintenance checks are essential to maintain the integrity of your rental property. We recently heard a story from a landlord who got busy and skipped the annual boiler check on one of his properties. As luck would have it — of ALL years for the boiler to fail — it was that one. Sure enough, the temperature gauge malfunctioned in the middle of the night and triggered a water pipe to release. You can imagine the tenant’s surprise when he woke up to a murky wading pool in his basement.
Don’t wait for minor maintenance jobs to turn into expensive problems. Schedule and prioritize routine maintenance checks of your properties. If it becomes a task that’s hard to fit into your busy schedule, consider working with a property management company.
Mistake #4: Not knowing the market well enough to charge competitive rates
Not charging high enough rent is the most common mistake we see landlords make. Sometimes it’s because they like their tenant so much that they can’t bring themselves to charge more. Other times it’s because they don’t raise the rent when renewing the lease.
More often than not, these problems stem from not knowing the market well enough. Landlords who are not in the full-time business of property management don’t charge enough rent from a lack of knowledge due to frequent changes in the industry.
Receive a free rental analysis from us at the Blackarc Property Management. We’d love to help you make more money on your real estate investments.
Learn more about Billings Leading Property Management at theblackarc.com